What to expect this week in the Indian equity markets?

27 Jun 2022 , 08:14 AM

Indian equity markets are likely to see another volatile week. Economic news will remain in the negative zone. Inflation is taking its toll in India and in other major countries. In US hike in interest rates has started getting reflected in rising home loan interest rate. Latest data shows that sales of houses has started declining in USA. In a number of companies, including at Rolls Royce in UK, workers’ unions have started disrupting work as they demand increase in wages. The spiral of wage cost inflation has started. Wage cost inflation spiral means higher prices leading to increase in wages, which in turn increases prices further as higher wages get reflected in prices.

 Prices of some soft food commodities came down last week. Oil prices are also coming down because of concerns about recession. But oil is still trading in the high zone. For India relief has come from increased import of Russian oil. Russion oil is currently trading at a much cheaper price than Brent Crude or WTI crude. 

In the absence of any positive economic news, short term profit booking and value buying will move the markets. This will keep the markets volatile. This is also the week for expiry of derivative contracts. Monthly derivative contracts such as Futures & Options expire on the last Thursday of the month in Indian equity markets. This is likely to add further volatility to Indian equity markets this week. Foreign Investors are highly likely to remain net sellers in the Indian markets this week today. Rupee will remain in a weak position against the dollar.